A bankrupt business trainer whose mentoring companies are in liquidation has been revealed as a taxpayer-funded envoy hired to teach fledgling Tongan firms the secret of success.

Auckland’s Richard Peter Gee, 64, was in Tonga last week on his third mentoring session since being made bankrupt in the High Court at Auckland. Herald inquiries have found Mr Gee received $29,000 for the mentoring courses in Tonga – part of an aid package for the Pacific nation funded by the Ministry of Foreign Affairs and Trade.

A spokeswoman for Mfat – which runs the aid scheme – said it had no idea Mr Gee had been bankrupted during a period he was carrying out business mentoring courses.

She said the money was paid to the Tonga Chamber of Commerce as part of a larger aid package and the organisation then handled contracting itself. She said Mfat believed $29,000 had been paid to Geewiz Group Professional Speakers Ltd which provided “six courses of up to five days in length” between 2013 and 2015.

“The ministry takes the delivery of its business development programmes very seriously. We have high expectations of the procurement standards and contractual arrangements set by our aid partners, and expect action to be taken in the event of any potential breach.”

The fault appears to be with the Tongan Chamber of Commerce, but it is still our money being wasted.

Mr Gee was made bankrupt in August last year. The bankruptcy followed the liquidations of two mentoring businesses and a High Court case critical of how Mr Gee met his legal obligations as a company director. In the case, Justice Brendan Brown found it had been “irresponsible” for Mr Gee to continue to trade as Richard Geewiz Gee Consultants Ltd when he had not worked out how to pay outstanding taxes.

Mr Gee’s former accountant Tim Livingstone told the court the company operated by Mr Gee was insolvent the entire time it was in operation. He had written to Mr Gee each year advising him of this.

Mr Gee was ordered to pay $85,000 in the wake of the company liquidation. It was separately found the successor company, Geewiz Ltd, also went into liquidation in 2011 and was found to be owing $70,000.

I think most people would agree that someone whose business mentoring business has gone bankrupt, is probably a very bad choice to be a business mentor.

However we are the country where the host of The Apprentice went bankrupt, so maybe it is following in those foot steps!

Something is seriously wrong at the Ministry of Foreign Affairs and Trade. Diplomats must speak with one voice when dealing with foreign states. In the case of the alleged Malaysian sex offender, they did not. The official line was that the Government wanted Malaysia to waive Muhammad Rizalman’s diplomatic immunity. But informally the diplomats were apparently telling Malaysia the man could go home.

This is either wilful disobedience or extreme incompetence. It is hard to believe that any diplomat would knowingly subvert the Government’s expressed wishes and policy. Sacking would be the only possible punishment. But the incompetence is just as serious, and on the face of it should also lead to dismissal.

I don’t think you make employment decisions on the basis of editorials, and also you decide on the basis of someone’s overall job performance, not just one stuff up. However I do agree this is very serious.

One astonishing revelation is that the ministry’s chief executive, John Allen, did not know the key details about the Malaysian fiasco until last Friday. He says this was the result of the ministry’s policy of “compartmentalisation” of information. This policy has clearly gone too far if it means that an extremely serious situation is kept from the ministry’s own boss. “Compartmentalisation” on that scale is madness.

I agree. MFAT has a secrecy culture that goes to extremes, and in this case is madness.

There remains a suspicion, after all, that the present shambles has its roots in the disastrous restructuring of the ministry under McCully’s watch. That “redisorganisation” led to a revolt of the ministry’s most senior staff and then to an apparently botched witchhunt ordered by State Services Commissioner Iain Rennie.

The whole project was misconceived and mismanaged, based as it was on the principle that the ministry could operate with far fewer experts.

I argue quite the opposite. I think this shows why change was necessary. Some (not all) MFAT staff regard themselves as a law unto themselves. They think foreign policy is their exclusive preserve, and the wishes of the Government of the day has little to do with how they do their jobs. Yes Minister struck close to the truth here.

I suspect this is why John Allen wasn’t informed. He may be the Secretary for Foreign Affairs, but’s he not a life-ling diplomat – so he wasn’t told.

NZ likes to say we have an independent foreign policy. The last few days have made it look like MFAT foreign policy is so independent, it is even independent of the NZ Government!

It’s almost like an episode of Yes Minister. The official letter says we want him extradited, but then some diplomats say “Don’t worry about the letter, it is just pro forma”.

Fortunately for the victim of the attack, the diplomat who was changed is now being returned to New Zealand to face charges. Kudos to the Malaysian Government for this decision.

Allen himself was told nothing about the incident until last Friday, which he said was created by Mfat’s strategy of ‘‘compartmentalising’’ information to limit its spread. He said he should have been told and that Mfat’s communications policy would form part of an independent review.

This is why MFAT needs a shake up. Some sections think they are a law amongst themselves. You don’t compartmentalise information away from the Chief Executive.

That is why the leakers could argue they had a wider duty than their narrow duty of loyalty to the Government. Of course bureaucrats should not and must not leak willy-nilly. A broadly impartial public service should be able to be trusted with certain kinds of information. Leakers know they run a risk if caught. They must be quite certain that the public benefit of the leak outweighs the duty of confidentiality. And they must be prepared to face the music if caught.

In this case there was a wider public duty and therefore the leak was justified. No government has the right to demand silence from the victims of a misbegotten purge. No government should expect the “debate” to be confined to the victims and their executioners. No government should seriously expect this sort of thing not to leak.

The proposed restructuring, which had been ordered by the new head of MFAT to better align the ministry with New Zealand’s evolving trade promotion and diplomacy needs from Europe to Asia, aroused enormous opposition within the ministry. MFAT people had, of course, every right to oppose the changes. But, as Rennie observes, at that stage the correct and professional way to do that was through the proper process, which had then barely begun. In this case, the public servants concerned were not blowing the whistle on any impropriety but were seeking rather to shortcut and sabotage a proper process.

This is key. The Tier 3 managers resorted to sabotage before the process had barely begun.

The motive, at least so far as the leaker of the Cabinet papers is concerned, was ultimately to discomfit the Government. That person could not be identified with certainty but there was a strong suspicion it was a former member of the Labour Party research unit. Other MFAT individuals may have been trying to protect themselves and their own positions in MFAT.

The point about leaking and whistleblowing is that they are justified as serving the public interest by the need to protect the integrity of an institution or a system. In this case, the leakers undermined the system by taking on what amounted to a party-political role. They also undermined the honourable cause of whistleblowing.

A tier 3 manager is a very senior manager. They are one step off the executive team who report to the CEO. They are the managers who manage large sections or teams within an organisation.

The Rebstock report into the behaviour of a number of Tier 3 managers at MFAT shows an alarming lack of political neutrality and professionalism. These are not junior staffers, but what should be trusted senior public servants. Some extracts:

Nine Tier 3 managers misreported to the investigation how they handled the HOM’s joint letter and so misled the investigation.

Two Tier 3 managers (no longer employed by MFAT) were so opposed to the change proposals they ignored the fact that the consultation was a staff in confidence process. … They encouraged or supplied unauthorised government information to the partners group and the FSA for use in their public campaigns and encouraged former New Zealand diplomats to lobby Ministers directly.

The evidence obtained by the investigation, as outlined in this section, showed that [Y] and [Z] engaged in a strategy designed to ensure the change proposals did not become a reality. This strategy included working outside the staff in confidence consultation process prescribed by the Secretary.

This pattern of ignoring the requirement to protect the confidentiality of discussions in the Division Directors’ meetings continued through March 2012. On several occasions [Y] forwarded his notes of these meetings and other communications intended only for senior managers to other MFAT staff outside his own team, including the FSA President, who were not attendees at the meetings or intended recipients of other communications.

Persons Y and Z have been named as Nigel Fyfe and Derek Leask. Leask is now retired, but Fyfe is a Deputy Secretary at the Ministry of Justice.

I can not imagine how the Secretary of Justice, or Ministers, could possibly have any confidence in Fyfe , in light of the evidence of the Rebstock report that he passed on confidential documents to people not authorised to have them. I would think the SIS would have grounds to revoke his security clearance. Note I am not saying he leaked outside MFAT – but if your employer says this is for tier 3 and 2 managers only, you don’t e-mail it to other staff.

More to the point, how could the Secretary of Justice have confidence that any restructuring at Justice wouldn’t be undermined and confidential information given to unauthorised persons?

And let us not think this was about any high and mighty noble purpose. Rebstock notes:

It is natural for every public servant to want to protect their own personal interests, but they have a duty to the Government and to their organisation not to use their professional position, including access to Ministers, to promote their personal interests.

Those who leaked to Labour sold out their department and their neutrality to keep their 30 pieces of silver.

It is not known who within MFAT was talking to Labour, but calls were made directly to Phil Goff from MFAT conference rooms.

MFAT telephone records for 2 April 2012 show a call to the Labour Party Spokesperson on Foreign Affairs and Trade’s cellphone number at 4.54pm. The call lasted seven minutes 44 seconds. The telephone used was installed in a small meeting room on Level 14. The whole of Level 14 is accessible only with security cards.

Incredible – one or more MFAT staffers calling an Opposition MP on his cellphone from a secure MFAT conference room.

MFAT’s email records, between 26 March 2012 and early May 2012, show [Y] exchanging emails with a reporter from the Fairfax Political Bureau. The reporter appears to have initiated this exchange after a work trip to Seoul which they had both attended. [Y] met the reporter for coffee on 23 April 2012 and for a drink on the evening of 2 May 2012. The investigation has not been able to establish what was discussed at these meetings. [Y] said his reason for meeting the reporter was to seek information about current issues at his new employer.

Yeah, right. You don’t meet a journalist to find out what is happening with your employer. You meet to tell them what is happening.

Furthermore, [Y] did not resile from his actions during the MFAT change process and submitted that his behaviour was justified because the change proposals were unprecedented and the management of the process was “deeply flawed”.

So as I read this Fyfe is saying he would do the same again, if he disagree with a restructuring process. That would make me very nervous if I was his employer.

Actions of some MFAT employees in supplying information and personal views directly to Ministers, to the Labour Party Spokesperson on Foreign Affairs and Trade, to officials and former public servants outside MFAT and to the media fuelled the political debate. This directly undermined MFAT’s ability to provide Ministers with robust, unbiased advice once the Secretary had consulted and considered the views of staff at MFAT.

61 Prior to the change programme, MFAT had been regarded as an agency that could be trusted with government information. This trust, locally and internationally, is critically important given the role that MFAT undertakes on behalf of the Government and all New Zealanders.

62 The leaks of documents that had been prepared by MFAT staff detrimentally affected MFAT’s reputation as a trustworthy organisation, thereby damaging New Zealand’s interests and the Government’s trust and confidence in MFAT.

Those MFAT managers who did the above put their personal interests ahead of the interests of their department.

But it almost certainly wasn’t one of them who leaked the cabinet paper. We turn to X:

[X] was employed by SSC through an employment agency on a short term contract during the period relevant to the investigation. SSC was aware that before joining SSC, [X] had been employed by Parliamentary Services in the Labour Party Research Unit.

And:

[X] confirmed [X’s] previous role working for the Labour Party in the office of the Labour Party Leader and that [X] had maintained social contact with colleagues from that time. SSC’s logs of external email traffic for [X] showed [X] was in touch with some colleagues in the Labour Party Research Unit, including in the fortnight before the Cabinet Committee papers were leaked.

Some details:

9.02am: Scanned a document of 10 pages9.04am: Scanned a document of 18 pages.

[X] could not explain the scanning of documents of the same number of pages as the two Cabinet Committee papers, either side of the photocopying activity.

It’s not proof, but in the absence of any explanation as to what document he was scanning in, the conclusion that it was the Cabinet Papers is very reasonable.

His initial denials were not much:

When asked: “Are you quite clear [X] that you didn’t scan those Cabinet Committee papers to provide them to someone who was not authorised to receive them?” [X] replied:

I can’t recall to be honest. I can’t remember.

I can’t recall if I leaked it or not!

Now X of course has name suppression which means that suspicion will fall not just on him, but all former Labour parliamentary staff. If they find it hard to get jobs in departments or companies that require professionalism and confidentiality, then they should blame X for his name suppression which leaves the rest of them under a cloud of suspicion.

I can’t find the exact reference but I recall Phil Goff claiming the leaks were from affected MFAT diplomats. If Person x is the leaker (which is almost certain), then Phil Goff lied because I guess saying it is a leak from a former staff member who is a temporary clerk in the SSC doesn’t sound as good.

More than 18 months since its launch and costing hundreds of thousands of dollars, an inquiry into leaks at the Ministry of Foreign Affairs and Trade (MFAT) is set to send ripples through the Wellington bureaucracy.

The report, due for release today, is expected to point the finger at a clerical worker as the main suspect behind a Cabinet document leak.

This is a key piece of information. Labour tried to portray the leaks as coming from disgruntled diplomats who were personally affected by the proposed restructuring. And while it would be wrong for them to leak also, you have more sympathy for a leak if it comes from someone who is personally affected by some propsoed action.

But as far as I know this clerical worker was not affected by the proposals. In fact he didn’t even work for MFAT. So his motivation for leaking was not to fight the proposed restructuring which could affect him. So what was it? Well my guess is that it was pure partisan politics – to help the Labour Party. Because while I don’t know for sure who Person X is, the name that has floated around is that of a former Labour Party parliamentary staffer. Now if this is correct, that means that this leak was indeed all about partisan politics, and nothing to do with MFAT restructuring.

The court challenge, taken by someone known as Person A, is understood to relate to a person who will be named as Person X in today’s report.

Person A has had heavy suppression orders throughout, including around his present and former places of work, but the Court of Appeal allowed news media to report that he was a clerical assistant.

People may wonder how a clerical assistant can afford to fund legal action all the way to the Court of Appeal. Maybe a certain political party helped pay the bills? Could they have even used their parliamentary budget to do so? I don’t know, but a question worth posing to Labour is whether they did, and can they confirm Person X used to work for them?

Also as far as I know, Person X does not have name suppression – they just have not been named. There is nothing preventing the media in asking certain people if they are Person X, and printing their responses. I was wrong. He does have name suppression in relation to he court case, so the name or details that identify him can not be made public. Am unsure if media will try and get name suppression lifted through the court.

Anyway I look forward to reading the report, and the 16 pieces of circumstantial evidence that point to Person X.

The person known only as “A” in relation to a legal challenge to the Paula Rebstock-led inquiry into the unauthorised release of sensitive Cabinet documents came into contact with the documents in a clerical role, the Appeal Court has heard.

This is a significant revelation. Most people had been assuming that Person A was a diplomat – an MFAT professional. And while no civil servant should be condoned for leaking “sensitive Cabinet documents”, there was a reasonable amount of sympathy for Person A on the assumption that they were an MFAT diplomat directly affected by the proposed restructuring.

But that assumption is wrong. So does this mean other common assumptions re Person A and the leak could be wrong.

Could the assumption Person A works at MFAT be wrong? Might it be someone from elsewhere in the public sector?

Could the motivation then be not personal or professional, but purely political and partisan?

How does someone who is in a (presumably not highly paid) clerical assistant afford the cost of legal action to stop the report in both the High Court and the Court of Appeal?

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The person suspected of leaking confidential Cabinet papers about restructuring at the Ministry of Foreign Affairs and Trade has appealed against a decision that could have identified them.

It is not clear yet whether leading public servant Paula Rebstock, who heads the leak inquiry, intends to name the person she suspects. She acknowledges she does not have proof.

Drafts of her report into the leak, which happened in May last year, do not name the person known only as “A”, but States Services Commissioner Iain Rennie, who ordered the report, already knows who “A” is.

“A” took action in the High Court about the way the inquiry has progressed, and to protect his or her identity.

Justice Robert Dobson’s decision was made public yesterday. He said “A” did not have legal grounds for complaint if the report was going only to Mr Rennie.

But if it was to be made public, “A” should be given more information about the grounds for Ms Rebstock’s suspicions, should have a chance to respond and have it considered.

The decision isn’t online but the outcome seems clear. Person A must be very worried if he or she is appealing to the Court of Appeal.

I’m sure there is an innocent reason for why Person A scanned in and copied a confidential Cabinet paper. We all await to hear his or her explanation.

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After 12 months and $250,000, an inquiry into leaked Foreign Affairs Cabinet papers may never see the light of day.

In the High Court at Wellington yesterday, the lawyer for a person known only as “A” said the report by inquiry head Paula Rebstock voiced a “strong suspicion” that his client was responsible for the unauthorised disclosure of sensitive Cabinet documents, but offered no evidence to back it up.

The identity of Person A is well known around Wellington.

It is rare for a leak inquiry to actually determine who did it, or probably did it. It’s good that Rebstock appears to have been able to do so.

Labour have been calling out for months that the leak inquiry should halt. This to me reinforces that they know their source had been identified.

It is worth reflecting upon the fact that you will never get cast iron proof of whom leaked unless you capture them on video handing the documents over. But what you can establish is whom they scanned, copied or e-mailed documents with no valid reason for doing so.

Lawyer Jason McHerron told the court it was clear Ms Rebstock intended to proceed to find that “A” was responsible for the unauthorised disclosure of two Cabinet committee papers at the centre of the leak inquiry.

That was despite “A” denying being responsible.

Last month, Justice Dobson agreed to an injunction to delay the completion of Ms Rebstock’s report pending a judicial review. He also issued a gagging order against Ms Rebstock and State Services Commissioner Iain Rennie, who ordered the inquiry.

As I said the identity of Person A is well known, and even if they win their court case, I suspect their identity will not remain a secret.

The court heard yesterday “A” scanned and copied Cabinet documents but had repeatedly denied distributing them. A forensic examination was unable to find any evidence “A” sent the documents to anyone else. Without such evidence, the allegation should not be repeated, Mr McHerron said.

If you scanned in a cabinet document without being asked to do so, you’d better have a bloody good explanation for doing so.

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Labour’s Phil Goff has attacked a big pay rise for the head of the Foreign Affairs ministry as a blatant double standard at a time when many diplomats are losing their jobs.

Figures on state sector chief executives’ pay released today showed Mfat boss John Allen’s salary last year was the highest among chief executives, with a pay rise of $40,000 taking his package between $620,000 and $629,999.

I have no problem with Govt CEOs getting paid market rates, and getting pay rises when they perform well.

But the MFAT restructuring led by the CEO has been somewhat of a clusterfuck, and for the SSC to give the CEO that presided over it a 7% or so payrise is going to go down badly with many. John Allen was an excellent CEO of NZ Post, and may well be doing many things well at MFAT – but the restructuring was a critical piece of work, and there was a near complete failure to get institutional support for it.

This is like the vexed issue of private sector CEOs pay. I don’t think most people are against CEOs getting huge salaries – so long as they and their companies are doing well. Few people ever would have claimed that Rob Fyfe didn’t add value to Air NZ well in excess of a million dollars. Steve Jobs was once valued by the market as being worth several billion to Apple, as that is how far their share price fell on news of his cancer.

But what annoys people is when a company is not performing, and the CEO gets a big pay increase and bonuses.

The figures, released by the State Services Commission also showed shamed former head of the Department of Building and Housing (DBH) Katrina Bach was paid out $81,105 in entitlements when she left the job earlier this year.

This one is a non-issue though. If someone is owed annual leave, they of course get it paid out when they leave. Surely there is no suggestion that the Government should break the law and not pay someone their legal entitlements.

Overall, the average increase in base salary for chief executives was 2.7 per cent. That compared with movement in average base salary across all public service staff of 3 per cent, Rennie said. …

One fifth of state sector bosses took an effective pay cut with either no change to their pay or a reduction.

2.7% overall is pretty modest. The only real issue is the big increase for MFAT CEO.

Women are rapidly disappearing from the frontline of New Zealand’s diplomatic service, with Foreign Minister Murray McCully overseeing a halving in the number of females serving as ambassadors and high commissioners.

In the last year of Helen Clark’s government 30 per cent of posts were held by women; under McCully it is 16 per cent.

McCully, who gets the final say in the appointments, blames the Ministry of Foreign Affairs (MFat) while the ministry has told the Foreign Service Association (FSA) women themselves are at fault.

“We have had some explanation from the ministry that women are not applying for the posts,” FSA representative Warren Fraser said. “It is not something we instinctively feel is true but we have not been able to verify ourselves.”

It is a pity neither the story nor the FSA has verified this, because it is quite central to the story. If the decline in the number of women at high Commissioners and Ambassadors is because they keep getting rejected in favour of men that is a very different story, to one where simply few women have applied.

Political commentator Matthew Hooton blogged during the week that McCully’s agenda was to promote “Gen X” men, people now in their late 30s and early 40s.

I blogged what Matthew said in NBR (it was the print edition not a blog incidentally), and he never said McCully’s agenda was to promote men. The addition of “men” is made up, and I note not in quote marks. Matthew said:

To the fury of ageing baby boomers, Mr McCully has aggressively promoted top Gen X talent.

Vangelis Vitalis, 43, has been appointed ambassador to the EU and Nato; Taha Macpherson, 40, to Turkey, Israel, Jordan, and the Palestinian Authority; Reuben Levermore, 36, to the Philippines; and Justin Fepuleai, 38, to Afghanistan. Ben King, 39, is John Key’s new chief foreign policy advisor in the Department of Prime Minister and Cabinet.

While a late baby boomer, Patrick Rata has been appointed ambassador to South Korea after Mr McCully discovered him in a back-office role having committed the ultimate Mfat sin – taking a couple of years off mid-career, to be Mr Moore’s right-hand man at the World Trade Organisation.

Yes the examples given were all men, but there is a world of difference to say that his agenda is to promote men.

All his six recent appointments were men and only one, Afghanistan ambassador Justin Fepuleai, was not white.

Good God, so now they are trying to paint McCully as racist and sexist. The trouble is, rather than five in six being “white”, I think it is “two” in six. If anything, someone could accuse McCully of bring politically correct in recent appointments.

I understand Taha Macpherson is Samoan and Patrick Rata is NZ Maori. Adding them to Justin Fepuleai and in fact three out of six are Maori or Pacific Island. And a fourth is a Greek immigrant, which arguably doesn’t fit the rather bizarre categorization in the story of being “white or “not white”.

Murray McCully may be positioning himself as a fiscal enforcer but he’s really a bit of a wuss.

Proposed $25 million cuts to the Ministry of Foreign Affairs and Trade ( Mfat), making 305 mostly Wellington-based bureaucrats redundant, simply bring it back to where it was in 2007/8 before Winston Peters announced his massive $600-million five-year spend-up.

Which was in fact more money than MFAT even wanted. He told them to triple the size of their budget bid around 24 hours before the deadline.

After all, Mfat, under its existing budgets, had successfully negotiated CER, the Uruguay Round agreement, the free-trade agreement with China and phase one of the Trans Pacific Partnership. It had won election to the UN Security Council, hosted Apec and CHOGM, installed Mike Moore and Don McKinnon to head the World Trade Organisation (WTO) and Commonwealth, and broadly restored relations with the US.

It wasn’t obvious it needed vastly more money than previous foreign minister Phil Goff had provided for six years.

Goff now seems more passionate about defending every last MFAT job, that anything he did as Opposition Leader.

Mr McCully’s more important changes involve not the number of personnel but their deployment.

Mfat has long been the most conservative of departments.

The only way in was its graduate programme. Time served drove promotion. No one was ever fired. Its employment agreements insist that older people have first entitlement to new positions over younger staff. Consequently, it struggles to retain talented 30-somethings.

To the fury of ageing baby boomers, Mr McCully has aggressively promoted top Gen X talent.

Vangelis Vitalis, 43, has been appointed ambassador to the EU and Nato; Taha Macpherson, 40, to Turkey, Israel, Jordan, and the Palestinian Authority; Reuben Levermore, 36, to the Philippines; and Justin Fepuleai, 38, to Afghanistan. Ben King, 39, is John Key’s new chief foreign policy advisor in the Department of Prime Minister and Cabinet.

While a late baby boomer, Patrick Rata has been appointed ambassador to South Korea after Mr McCully discovered him in a back-office role having committed the ultimate Mfat sin – taking a couple of years off mid-career, to be Mr Moore’s right-hand man at the World Trade Organisation.

Surprisingly, given Mr McCully’s ultra-partisan reputation, there has been no hint of political favouritism.

As a student leader, Mr Vitalis led protests against the National government in the early 1990s. Mr Macpherson spent three years as Mr Goff’s top aide. Mr King worked for trade minister Lockwood Smith, whom Mr McCully has fought in bitter intra-party warfare, and Mr Rata for Mr Moore. Dr Fepuleai’s PhD is in political science, surely something deserving Mr McCully’s scorn. Arguably only Mr Levermore fits the McCully stereotype, having played professional rugby in France.

With these and future appointments, Mr McCully has decided that talented Gen Xers shouldn’t have to wait until their late 40s or early 50s to reach the top tier. Nor should older talent be punished for working temporarily outside Mfat’s hallowed halls.

Not everyone at MFAT is unhappy with the changes. They are providing opportunities also.

As many as 166 kiwi diplomats are still stationed in the UK, continental Europe and the US, even excluding the delegations to the UN, WTO and Russia.

In comparison, just 23 diplomats are stationed in Australia, 41 in India and 44 in mainland China.

Mfat still has 11 diplomatic posts in Europe (excluding Geneva and Russia) but just two in Australia, two in China and one in India.

There is a full-scale embassy in Stockholm, which Helen Clark opened in 2008 and Mr McCully plans to close, and in Vienna, despite New Zealand’s exports to Sweden being just $72 million in 2010/11 and to Austria just $18 million.

In contrast, New Zealand has no presence in Chongqing, with its 30 million people and surging economy, nor is New Zealand represented in India’s boomtown of Bangalore.

Mr McCully is on the right track but he still has a long way to go to build a foreign service that properly reflects New Zealand’s place in the 21st century.

Matthew defends the changes so well, he could apply to be a ministerial press secretary

The Ministry of Foreign Affairs and Trade (MFAT) has confirmed it is cutting around 300 staff as Finance Minister Bill English says it’s crunch time for the public sector.

MFAT’s chief executive John Allen this afternoon said it would be cutting 305 staff.

My sympathies go out to those affected. It is never nice to go through such a major restructuring. However in my experience MFAT staff are very capable and competent, and the majority will find good opportunities elsewhere.

The news came as English said Kiwis were about to see the public service change.

English said the Government had last year told public sector chief executives to look at their own operations and ”tell us how they could be improved to deliver better services with little or no new money”.

The reality is that we are borrowing money to fund the Government, and this is not sustainable. There is a path back to surplus, but it can only be achieved by restraining Government spending. The alternative is to go down the path that Greece did, or to try the failed policies of tax more and spend more.

Allen said 600 MFAT staff would have to reapply for their jobs in new specialist roles. The ministry has 1340 staff, half of which are offshore

That is a huge restructure.

He also confirmed changes to remuneration including offshore allowances. Staff would be asked to make a “nominal contribution” to their living costs overseas.

They should not end up out of pocket for being posted overseas. But if for example it is calculated they are saving say $200 a week in living costs by not being in NZ, then that could be the basis of a contribution. It shouldn’t be based on what their actual overseas expenses are at that punishes those sent to expensive cities.

Allen said the proposals created more flexibility, deepened expertise, and ensured appropriate representation – including non-resident ambassadors and smaller posts.

He confirmed they were also considering outsourcing some functions. That included a 24/7 call centre based in Wellington.

That’s quite a good idea. Rather than have each Embassy have a call centre, you have one global number for travellers in need of assistance?

The restructuring was expected to save $20-25m annually.

Excellent.

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Most of the Ministry and Foreign Affairs 600 staff will have to reapply for their jobs under a restructuring proposal that could see up to 300 jobs go and lucrative allowances for staff on overseas postings whittled back to boost pay packets back home.

Staff will be told on Thursday about proposals to cull up to 50 diplomatic positions by closing embassies in cities including Stockholm and Warsaw, and downsizing others.

Worth stressing that these are options, and no formal plan has been presented yet.

Labour MP Phil Goff said he would be alarmed at any moves to slash New Zealand diplomacy abroad.

But sources say a bottleneck at the senior management level had seen a drift of younger, talented staff to positions in the private sector, because MFAT’s system for deciding promotions barred many of those staff from getting a better position if someone more senior than them applied.

They also fingered the perks associated with overseas postings, which acted as a strong incentive for senior staff to stay on, and helped create a huge imbalance between the pay packets of workers back in Wellington, compared with their colleagues overseas.

One source said diplomats and staff seconded to overseas missions had all their expenses covered including school fees, accommodation, transport and travel and also received an allowance equal to 20 per cent of their salary if their spouse was not working, plus extra allowances for each child.

Once salaries and extra support were taken into account, some senior diplomats were receiving equivalent to $500,000 a year, while staff back in Wellington received rates considered below average for the public sector.

The overseas postings certainly are prized.

Some of the jobs that are set to disappear from overseas posts include drivers, chefs and administration staff, a number of which are seconded from Wellington and receive the same allowances.

And presumably locals can be hired to do these non diplomatic jobs.

It will be interesting to see what John Allen proposes on Thursday. The quality of staff at MFAT is generally excellent – they are one of the top public sector ministries. But it doesn’t mean that no changes should be made to improve performance.

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New Zealand First leader Winston Peters has warned that planned Foreign Affairs job losses and the closure of overseas posts will cost more in the long run than they save.

A State Services Commission report last year said the ministry was looking at slashing 200 jobs out of almost 1000.

An announcement on the details is expected soon.

Peters, a former minister of foreign affairs who negotiated a big increase in funding for the portfolio, said a “slash and burn exercise” would seriously affect this country’s overseas trade.

He said the move was a “serious, retrograde step” at a time New Zealand was desperately trying to increase its export trade.

Phil Goff has also joined in the bleating, arguing that more bureaucrats in MFAT will increase exports. If only, it was so simple.

As it happens exports have been growing quite nicely. In the last three years, they have increased 15.1% to $46.1b. That’s pretty good considering the wobbly global economy. Why have they increased?

Well exports to China have increased 169.5% to $5.6b. The dollar increase of $3.5b makes up 59% of the overall increase in exports.

It was three years ago we signed a Free Trade Agreement with China. An agreement that Peters as Foreign Minister not only refused to vote for, but actively campaigned against with a newspaper ad campaign urging people to sign up in opposition to the FTA.

So Peters’ record is having opposed the China FTA which saw exports to China increase 170%, and instead his solution is more bureaucrats in MFAT. I doubt I have seen a more moronic economic prescription in recent times.

National shut down NZAID as an organisation and moved the aid programme back into MFAT, with the explicit aim of aligning the aid programme with foreign policy goals. This has undermined the credibility and legitimacy of the aid programme.

Labour will re-establish NZAID as New Zealand’s international development agency, committed to the elimination of poverty, implementing a high-impact development programme, transparent and accountable, and contributing to New Zealand’s broader foreign policy goals.

First of all it is idiocy to say that our aid programme should not be compatible with our foreign policy goals. Of course it should be.

The issue of whether NZAID should be a semi-autonomous agency or a division within MFAT has arguments on both sides. I wasn’t actually convinced that it should have been merged back into the MFAT. However as it has now been merged back in, the last thing you want to do is pull it back out again. This would be massively costly and disruptive. You can’t have its status changing every few years.

Basically Labour’s policy is to just reverse everything that McCully has done. It’s not future looking in any way at all – it is just trying to turn the clock back, without realising you can’t.

I met a former MFAT colleague a few days after Foreign Affairs Minister Murray McCully had delivered his speech on planned changes to the way the Foreign Affairs and Trade Ministry does its business.

I was reminded that many of the proposed changes were actually suggested in the 1989-90 period and about how the MFAT system had been able to muster so much opposition to the proposals that few were implemented. It is therefore with little surprise that I read editorials and op-eds from former diplomats questioning some of what is being proposed.

MFAT has managed to fight off change for many decades.

MFAT has been extremely resistant to change. It has taken longer to embrace new technologies and management systems than pretty much every other organ of government. It is hierarchical and it has never quite come to grips with the tension that exists between specialists and generalists within the organisation. And until Mr Allen took over as CEO, it has never valued experience gained outside the ministry. Those seeking to come back to the ministry after years away were told that they would have to enter at the level they were at when they departed.

MFAT seems to have this strange rule that you can’t be a senior manager there, unless you are also a diplomat.

I agree fully with Mr McCully that competition should be introduced at head of mission level. There are plenty of current and past public servants from New Zealand Trade and Enterprise, Treasury, the Economic Development Ministry, Customs and Defence with the skill-set and experience necessary to do a head-of- mission job. Martyn Dunne, who is about to go off to Canberra as high commissioner, is an example of this type of person. And from time to time politicians will be the right person for an assignment. Mike Moore is doing a great job in Washington DC right now, as is Jim McLay in New York.

Diplomats deal with both diplomats and politicians. Sometimes the best person for the job will be a senior former politician such as Jim McLay. What should cease is the practice of sending politicians such as Graeme Kelly to a senior overseas post.

I am on record calling for even more radical reforms of the head- of-mission appointment process than Mr McCully. I believe those nominated for these important roles should be forced to appear before the foreign affairs and defence select committee and be the subject of questioning on their knowledge and experience relevant to the proposed assignment.

An embarrassing leak to Australian media of a high-level New Zealand diplomatic cable has jeopardised future discussions between the two countries, Labour leader Phil Goff says.

The Government is investigating how the report, which details the takeover of the Australian prime ministership by Julia Gillard, fell into the hands of the Australian newspaper, which published parts of it yesterday.

Yeah this is almost as bad as that leak, where notes of confidential discussions with US Senators was leaked – jeopardising MFAT being allowed to sit in on any future discussions.

Now who leaked those again? Oh, yes, a Mt P Goff.

Mr Goff, a former Foreign Minister, called it a serious breach of protocol that undermined the integrity and credibility of the foreign service.

“It’s extraordinary that a confidential diplomatic cable could have found its way into the hands of the news media, and that could be potentially damaging to the relationship between New Zealand and Australia.

“Any confidential briefing likely to be given to New Zealand diplomats in Canberra is now likely to be withheld.”

Maybe the diplomats thought they were following the lead of that other P Goff?

Incidentally I agree it is a bad thing that confidential memo got leaked.

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I’ve blogged in the past on ACTA, the Anti-Counterfeiting Trade Agreement. Readers will gear a lot more of this in the next month, because the next meeting of the ACTA negotiators is in Wellington in April.

There are two major issues around ACTA. The first is that the negotiations are secret, and this has even upset the EU Parliament:

Wary of the lack of openness surrounding the Anti-Counterfeiting Trade Agreement (ACTA), virtually representatives of the EU parliament have banded together, voting 663 to 13 in favour of passing a resolution that would require the EU Commission (who are the EU’s representative in ACTA negotiations), to share all information about ACTA talks, and to refuse to support any Internet disconnection penalty for online copyright infringement.

The resolution is very specific and blunt about the EU Parliament’s displeasure with the lack of transparency around EU ACTA negotiations, citing concerns over the “lack of a transparent process in the conduct of the ACTA negotiations”.

The second is the concern that ACTA may force countries that ratify it, to legislate for Internet disconnection for people accussed or found to have infringed copyright.

Now, all trade agreements are negotiated privately, but whether an agreement on copyright law should be seen as a trade agreement is a big issue – most IP agreements are not. Many countries would like to be more open about ACTA, but the rules of trade negotiations are that you need unanimous permission to agree to anything – including releasing information. So just one country, such as the US, can block the release of the draft text.

I’ve attended two meetings (in my role with InternetNZ) with officials from MFAT and MED, and have to say I am impressed with their willingness to engage, within the limits of what they can say. They have consistently said their position has been that ACTA should not require NZ to do anything beyond its current law (including the replacement S92A). However they can not tell us what has been proposed by other countries, and the concern is what pressure there may be to get an agreement in the final stages.

What the Government has done is asked for public submissions on “enforcement of intellectual property rights in the digital environment”. If you have concerns about ACTA, you should take a few minutes to make a submission and state what is and is not acceptable to you. Topics include:

Liability of ISPs for third party infringement

Safe Harbour provisions for ISPs and associated conditions

Identifying Infringing Users

TPMs (Technological Protection Measures)

Now despite the ACTA negotiations being secret, a draft text has been leaked. And, assuming it is accurate, it shows the New Zealand negotiators in a pretty favourable light – opposing some of the more undesirable aspects.

On the balance this bit isn’t too bad–New Zealand is a good voice for sanity in the negotiations.

I was pleased to see from the leaked draft, that the official position of the NZ negotiators, was very much in line with the informal indications they had given. It is ironic that we can only verify this, because someone leaked a draft.

Now as I said the next round of ACTA, and the round most likely to be discussing the Internet section, is in Wellington from 12 to 16 April. I am hoping the organisers will allow an opportunity for some sort of public forum or dialogue with negotiators, and this request has been made.

InternetNZ has organised a PublicACTA conference on Saturday 10 April, which will allow interested people to debate the issues, form positions, and report them to the main ACTA negotiations the following week.

And in a further announcement, the keynote speaker will be Professor Michael Geist, the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa in Ontario. Michael is a real expert in this area, and a great advocate for balance in copyright laws.

I would recommend people attend, just for the chance to hear Michael. And if you wish to stay up to date with what is happening, I recommend this ACTA coalition site.

The appointment of New Zealand’s top postman John Allen as its top diplomat is an inspired move by State Services Commissioner Iain Rennie.

It signals that this Government wants to place greater emphasis on the trade side of the Foreign Affairs and Trade Ministry operations.

Prime Minister John Key knows that growth is the only way for New Zealand to succeed once the worldwide slump is behind us.

As tens of thousands of NZ jobs are lost, we are reminded how important economic growth is.

Mr Allen’s imminent shift from the state-owned enterprise NZ Post to head MFAT has some parallels with the National Party’s own election of John Key as its leader in late 2006. Neither man is encumbered by the ancient baggage borne by those around them, allowing each to take a fresh look at the challenges they face and at the solutions that might be offered.

In Mr Allen, according to one insider, the SSC has found a unique individual for a unique position, a man who instinctively understands that trade policy succeeds only when it and a country’s political leadership are aligned.

Foreign affairs in this country has mostly been the preserve of diplomats and cast-out politicians. The ministry has never been led by a businessman, or anyone who has not earned his spurs by patiently crafting elegant papers on arcane aspects of foreign policy, or poring over the entrails of who might succeed the Dear Leader in Pyongyang.

A bit harsh!

He has, instead, been a successful commercial operator, who straddles easily the white line between the public service and private sector sides of his SOEs operations, and is not without international experience.

He co-chairs the Australian New Zealand Leadership Forum and is accustomed to dealing with ministers, which will make accompanying the prime minister and foreign affairs minister on forays abroad easier. …

But his is a bold appointment, and his success or otherwise will reflect on Mr Rennie, Mr Key and ministers Murray McCully and Tim Groser, as well as on himself.

Reaction at MFAT is somewhat mixed I hear. Many of the younger staffers are really excited about a new broom, and see lots of exciting opportunities. A few of the more senior staff are nervous about the appointment, but not hostile.

New Zealand Post Chairman Rt Hon Jim Bolger today announced that the Group’s Chief Executive John Allen will leave at the end of June to take up the appointment of Chief Executive and Secretary of Foreign Affairs and Trade.

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Two good articles on MFAT and NZ Aid. Fran O’Sullivan has a look at MFAT and what the (yet to be announced) appointment of John Allen means. Fran says:

The commission’s panel was encouraged to look at the top MFat job in an “expansive way” and select a new chief executive who could (and this is the most important point) provide leadership for New Zealand – not just the Foreign Affairs Ministry – to help propel a much more aggressive approach offshore.

Fran says it is about getting less silos and better co-operations from not just MFAT, but also NZT&E, Immigration Service, Education NZ, and Tourism NZ.

Eight years ago an independent review of New Zealand’s aid programme raised major concerns about the way aid money was distributed.

The reviewers reported that the Foreign Affairs and Trade Ministry, which administered the aid programme, regarded aid as “an instrument of foreign policy”, that almost a quarter of the total aid budget of $250 million was spent on tertiary education scholarships – despite poor completion rates and the failure of many students to return home.

The ministry had used $500,000 of aid money to relocate the Samoan Department of Lands, Surveys and Environment so a new New Zealand high commission could be built, that the ministry used its development agency as a “dumping ground for non-performers” and that there was no “formal documented system of analysis or defined criteria used for determining the annual allocation process”.

McCully says:

“You don’t make changes like this if you don’t have to,” he said. “But in terms of the audit reports that have been brought down and some of the examples that I have looked at, over months now, I made up my own mind that I wasn’t going to carry the can for those things.”

Mr McCully has publicly questioned NZAid’s priorities, the amount of money it puts into “unproductive” regional bureaucracies, the size of its staff (281) and the proportion of the aid budget spent on internal overheads (about 8 per cent), but concern about accountability persuaded him to put it back under the umbrella of the ministry.

He says the agency, headed throughout its existence by former diplomat Peter Adams, wrongly assumed that being a semi-autonomous body entitled it to operate outside the normal state sector controls. “NZAid looked at the word autonomous and ignored the word semi.”

One of the consequences was that NZAid did not tell the ministry things it needed to know, “sometimes involving large amounts of money or serious matters of national interest”.

McCully also seems to think overheads were too high:

Mr McCully said he had also been concerned by NZAid’s response to questioning of its overheads. “I was annoyed to find that we were running overheads that were about 8 per cent of the total budget and that NZAid regarded themselves as being immune from any sort of scrutiny in that respect.

At a time when I was putting MFAT through the wringer, I was being told that NZAid were not open to that degree of scrutiny because we just gave them a bulk number and they decided how much of it was going to be overheads . . . . When I said, ‘Okay, presumably that will go down quite a lot when the budget goes up to $600 million,’ I was told, ‘No, it will go up to 9 per cent.’ I said, ‘How is that?’ They said, ‘That is just what we have decided.’ “

The story also focuses on what the goal should be:

He is also sharply critical of Mr McCully’s decision to abandon the poverty alleviation focus favoured by other Western governments as well as the International Monetary Fund and the World Bank.

“Economic development is an important contributor to poverty alleviation, but it’s a means to an end, not an end itself.

“The key to poverty alleviation is benefiting those most in need. Traditionally the elites benefit when money is pumped in with an economic development focus. You achieve poverty alleviation through investment in education, health, literacy and governance.”

Mr McCully, who has described poverty alleviation as a “rather nebulous concept”, says the success of the new focus will be measurable in, among other things, improved trade statistics.

“It is unacceptable that we should be exporting a billion dollars worth of goods to the Pacific and having empty ships coming back here. It shows that we are spending too much of our money on stuff that might help alleviate poverty this year but it does not do anything about next year and the year after.”

One thing is for sure – all eyes will be focused on NZ Aid for the next few years.